Do you remember, the line from Top Gun when Maverick turned to Goose and says, “I feel the need, the need for speed!” It seems consumers may be feeling that way about the digital mortgage process.
According to a recent J.D. Powers survey, 43% of all mortgage applications were done online. This was up from 28% a year ago; making online applications the most frequently used method.
Although the online process is quicker, consumers are still not totally satisfied. In fact, satisfaction with online applications actually declined by 8 points and was 10 points below the ratings for good, old-fashion in-person apps.
It’s all a matter of setting expectations. In today’s instant information and gratification society, consumers are expecting things to move a lot faster.
The mortgage approval and closing processes have to keep up. Consumers who are now using lenders offering such technology expect more. Lenders need to be realistic about what they can provide.
Overall, the average satisfaction with all mortgage lenders, digital or not, was down about 8 points. This was mainly due to extended times for closings in a purchase market. This, once again, evidences the need for setting proper expectations.
You should explain to consumers the need for more time to close a purchase loan over a refinance due to more moving parts, and parties, in the purchase transaction.
Another interesting result of the survey is that satisfaction with non-bank lenders is on the rise. Four of top five rated lenders were non-bank mortgage lenders.
Once again, Quicken Loans led the pack. But, this time they were tied by another non-bank lender, Guild Mortgage. Competition is good.
So, it looks as though lenders still need to go further to satisfy the needs of the new generation of home buyers and owners. It’s getting to the point where it may become mandatory for a lender to offer a completely digital loan process to even compete. Do you?
A process not only offering online applications but with immediate real-time approvals, followed by quick digital closings that can take place anywhere, anytime.
The new challenge is to offer the digital option and still offer competitive rates, pricing, and products. Game on.
This is great for the consumer. But, it puts extreme pressure on the lenders to get things done quickly, yet still, have the loans done completely and accurately.
Remember, in the end, it all falls on the lender to manufacture a loan of good quality, that is complete, accurate, compliant, and will perform as expected. Not too much to ask, is it?
While striving to meet the consumer’s need for speed, lenders must also meet the secondary market’s need for quality. Faster does not always mean better.
Remember, speed can also kill. The faster things go; the more cautious lenders need to be.
Technology is good. It can assist lenders in doing loans more quickly and efficiently, while also doing them more carefully. Use it wisely to benefit the consumer and yourself.
Speed shouldn’t just be about convenience.